The story of Valeant pharmaceuticals is a modern morality tale, a demonstration that corporate greed (or worse) does not always pay. The shares have plunged again after the new finance director signalled yet more bad news to come, and even after a post-Trumpian rally, they are still uncomfortably in the 90 per cent club.

Valeant was a whirlwind confection of takeovers, imaginative accounting and murky relationships with a distributor. It was driven by the belief that pharma research was a waste of money, and that customers for its drugs were only there to be exploited. This scorched earth, amoral approach helped drive the shares up almost 20-fold in five years.

Yet the real puzzle here is the willing suspension of disbelief among investors as the cracks started to show in 2014, as FTAlpaville reported. Over the following year, the price doubled and the market value approached $100bn as the company attacked the outside analyses, insisting all was well.

Since then the CEO has been handsomely paid to go away and spend more time with his lawyers. Today, it is not clear what Valeant really is, but its fate is some comfort to those running big pharma who think that finding cures and helping customers is an integral part of what they do.

This suggestion takes the biscuit

Paul Manduca takes the Boris Johnson approach to cake. His policy is to have it and eat it. He wants to keep the single market just as it is after Britain leaves the European Union. That would suit him and the lobby group he heads, fashionably rammed-together as TheCityUK, just fine. Tax would continue to pour into the treasury (£67bn a year, he claims) and our receding partners will have free access to the world’s second-largest financial centre. What’s not to like?

It’s hard to blame Mr Manduca for trying, yet even if he can persuade St Teresa and the three Brexiteers to take this line, it is fanciful to expect our friends on the continent to see it his way. The market in their currency is already outside their zone, while their stocks, derivatives and bond markets will follow if the London Stock Exchange is allowed to merge with Deutsche Borse.

Letting London’s insurers and fund managers rampage across La Manche as well would mean that almost the whole of the EU’s financial services industry was outsourced. However carefully Mr Manduca dresses up his proposal, this would surely be too much for their amour propre to bear. Or as Google translate puts it: Vous ne pouvez pas avoir votre gâteau et le manger aussi.

The Climate Act must go, eventually

Only five MPs voted against the Climate Change Bill in September 2008. In an orgy of self-righteousness, parliament voted near-unanimously to cut the UK’s CO2 emissions by 80 per cent by 2050, a date which is past the deadline of at least half of the Hon members who supported it.

Thus was laid the foundation of Britain’s barmy energy policy. This has given us dear domestic fuel prices in a time of plenty, prevented the building of gas-fired power stations, and culminated in the biggest post-dated cheque ever written on the British taxpayer, in the form of the finance for the Hinkley Point power station.

With luck, the UK should avoid power cuts this winter, but it will be close – and dirty – as National Grid admits. Now the Court of Appeal has lit a tiny candle in the energy gloom, upholding the state’s right to cancel the exemption from the Climate Change Levy for renewables. This was merely another little bung to the windmill subsidy farmers, but Infinis Energy argued that under the Climate Change Act, it could not be removed. The court disagreed.

The sceptics at the Global Warming Policy Foundation describe the Act as “a one-shot rocket, quite without steering and with precious little provision for deceleration…if a change of pace is not possible, abrupt termination becomes inevitable.” Repeal of this ill-starred legislation is a long way away, but the court has taken a baby step. Oh, and inside the European Union, even this would probably be impossible.

This is my FT column from Saturday

 

 

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